Correlation Between Wuhan Yangtze and XinJiang GuoTong
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By analyzing existing cross correlation between Wuhan Yangtze Communication and XinJiang GuoTong Pipeline, you can compare the effects of market volatilities on Wuhan Yangtze and XinJiang GuoTong and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Wuhan Yangtze with a short position of XinJiang GuoTong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan Yangtze and XinJiang GuoTong.
Diversification Opportunities for Wuhan Yangtze and XinJiang GuoTong
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wuhan and XinJiang is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan Yangtze Communication and XinJiang GuoTong Pipeline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XinJiang GuoTong Pipeline and Wuhan Yangtze is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Wuhan Yangtze Communication are associated (or correlated) with XinJiang GuoTong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XinJiang GuoTong Pipeline has no effect on the direction of Wuhan Yangtze i.e., Wuhan Yangtze and XinJiang GuoTong go up and down completely randomly.
Pair Corralation between Wuhan Yangtze and XinJiang GuoTong
Assuming the 90 days trading horizon Wuhan Yangtze Communication is expected to generate 0.66 times more return on investment than XinJiang GuoTong. However, Wuhan Yangtze Communication is 1.53 times less risky than XinJiang GuoTong. It trades about -0.36 of its potential returns per unit of risk. XinJiang GuoTong Pipeline is currently generating about -0.26 per unit of risk. If you would invest 2,708 in Wuhan Yangtze Communication on October 16, 2024 and sell it today you would lose (569.00) from holding Wuhan Yangtze Communication or give up 21.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wuhan Yangtze Communication vs. XinJiang GuoTong Pipeline
Performance |
| Timeline |
| Wuhan Yangtze Commun |
| XinJiang GuoTong Pipeline |
Wuhan Yangtze and XinJiang GuoTong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuhan Yangtze and XinJiang GuoTong
The main advantage of trading using opposite Wuhan Yangtze and XinJiang GuoTong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan Yangtze position performs unexpectedly, XinJiang GuoTong can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in XinJiang GuoTong will offset losses from the drop in XinJiang GuoTong's long position.| Wuhan Yangtze vs. Pengxin International Mining | Wuhan Yangtze vs. Chenzhou Jingui Silver | Wuhan Yangtze vs. Jinling Hotel Corp | Wuhan Yangtze vs. Hainan Mining Co |
| XinJiang GuoTong vs. Guangdong Transtek Medical | XinJiang GuoTong vs. Dongguan Tarry Electronics | XinJiang GuoTong vs. CareRay Digital Medical | XinJiang GuoTong vs. Allmed Medical Products |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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